Why come up with the money

Before the invention of coins played the role of money objects which have some value in the eyes of those who were willing to exchange for their manufactured goods.These items became the intermediary between manufacturers.Gradually, these intermediaries have become pieces of metal, which have become a universal means of storage and handling.

rationalistic origin of the money

Proponents of this theory are Paul Samuelson and John K. Galbraith.They believe that the money came as a result of an agreement between people.That is, at a certain stage of human society has decided to consolidate the functions of money in precious metals.

evolutionary origin of the money

Such an approach implies a transfer of money, for objective reasons, including: the division of labor, property separation of producers, economic growth, the need to ensure fair equivalent exchange.

To understand why come up with the money, it is worth considering their basic functions.

Functions of money

measure of value.This is t

he basic function of money, they are the equivalent of the cost of the universal service or manufactured goods.To compare different products, it is enough to bring them to the same value of currency - a single scale.

medium of exchange.Money greatly facilitate payments between producers - with the appearance of the coins and then banknotes barter has become much easier.If before the purchase and sale necessarily coincide in time, now, thanks to the emergence of an intermediary - the money is not necessary to simultaneously exchanging goods for goods and interrupt the production process.

storage means.Being the equivalent of any of the goods, the money can accumulate, creating savings.No need to create a repository for the goods, it is enough to put them into the equivalent of a bank or a jug.That money allows a person to create wealth.Cash reserves smooth the unevenness of economic life, which leads to stability.

means of payment.Money can make money, this is based on the work of credit institutions.This function allows you to borrow money without having to pay here and now, giving debt.

So allow money to trade and exchange, exchange their labor for any goods, receiving fair compensation.They allow you to compare the value of different things.Also, money can create a certain stock, and finally allowed to take goods without paying immediately the entire cost.That is why their appearance has become an objective necessity at a certain stage of development of society.